Barclays launches the 2010 Equity Gilt Study
London - Barclays Capital, the investment banking division of Barclays Bank PLC, is pleased to announce the publication of the Barclays Equity Gilt Study 2010. The Equity Gilt Study is one of the oldest and most-respected research reports in the City, having been published continuously since 1956, with UK data going back to 1899 and US data to 1925.
Highlights of the 55th edition include:
From feast to famine –
Tim Bond, Head of Asset Allocation at Barclays Capital, shows how recent financial market crises were in large part a product of changes in global savings flows. An abundance of global savings weakened the collective discrimination of risk and reward in investment, resulting in serial misallocations of savings and asset bubbles. Demographic trends suggest that the world is moving past the highwater mark for abundant savings. Although the frequency of bubbles might therefore decline, we highlight how the same trend will increase risk premia, particularly for bonds, in the decade ahead. We outline some reasons why equities are likely to earn an above-average risk premium over government bond investments in the next 10 years.
Bubble identification and some implications –
Michael Dicks, Chief Economist at Barclays Wealth, examines two ways in which asset price bubbles can be identified. Policymakers are now taking a much greater interest in stopping such bubbles materialising in the first place. However, unless they suddenly become extraordinarily successful in doing this, investors who help eradicate bubbles once they have appeared, by tilting their portfolios along the lines that we suggest, should manage to tap a decent source of alpha.
Dissecting recoveries –
Sreekala Kochugovindan, Asset Allocation Strategist at Barclays Capital, looks at how the past decade has provided investors with the rollercoaster ride of two equity market crashes and one of the sharpest global recessions in history. Fears that the 60% rally in equities may have finally drawn to a close have shifted investor focus toward the nature of recoveries. In this article we analyse the speed and duration of previous financial recoveries and examine the key drivers that have helped fuel or stall the rally. We find that historically equity rallies have not necessarily been sustained by economic growth and profitability, but monetary policy and credit conditions. We question whether a clearer understanding of the credit cycle can shed light on the timing of financial turning points.
For further information, please contact:
Head of Asset Allocation, Barclays Capital
+44 (0) 20 7773 2242
Chief Economist, Barclays Wealth
+44 20 7751 6641
Asset Allocation Strategist, Barclays Capital
+44 (0) 20 7773 2234
Corporate Communications, Barclays Capital
+44 (0) 20 3134 0230
NOTES TO EDITORS
About Barclays Capital
Barclays Capital is the investment banking division of Barclays Bank PLC. With a distinctive business model, Barclays Capital provides large corporate, government and institutional clients with a full spectrum of solutions to their strategic advisory, financing and risk management needs. Barclays Capital has offices around the world, employs 20,000 people and has the global reach, advisory services and distribution power to meet the needs of issuers and investors worldwide.
For further information about Barclays Capital, please visit our website www.barclayscapital.com
Barclays Capital - the investment banking division of Barclays Bank PLC. Registered in England 1026167. Registered office 1 Churchill Place, London, E14 5HP. Authorised and regulated by the Financial Services Authority and a member of the London Stock Exchange.